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"European Economic Recovery Plan""The European Commission urged EU governments to ...

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"European Economic Recovery Plan""The European Commission urged EU governments to ...

"European Economic Recovery Plan"

"The European Commission urged EU governments to jointly combat the economic slowdown with 200 billion euros ($256 billion) in spending and tax cuts to boost growth and consumer and business confidence. " The plan "...would see the 27 EU governments spend 1.5 percent of the bloc's gross domestic product to halt the slowdown that has already pushed some European nations into recession."
www.iht.com, 11/26/2008

The plan is expected to
A) decrease the recessionary gap and decrease the price level.
B) use the autonomous tax multiplier to eliminate the inflationary gap.
C) shift the AD curve rightward and increase real GDP.
D) shift the AD curve leftward and decrease the recessionary gap.

Textbook

Foundations of Macroeconomics

Edition: 8^th

Authors: Bade, Parkin

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